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IVA International Fund's Top 5 Trades of the 4th Quarter

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GuruFocus.com
·3 min read
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- By James Li

The IVA International Fund (Trades, Portfolio) disclosed this week that its top five trades during the fourth quarter of 2020 included new holdings in Danone SA (XPAR:BN) and Bayer AG (XTER:BAYN), a boost to its position in UBS Group AG (XSWX:UBSG) and reductions in H U Group Holdings Inc. (TSE:4544) and Haw Par Group Ltd. (SGX:H02).


The fund, which is part of New York-based International Value Advisors, employs a value-oriented investing approach: Fund manager Charles de Vaulx (Trades, Portfolio) looks for companies that have high financial strength and offer high margins of safety based on fundamental, intrinsic value.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

As of December 2020, the fund's $539 million equity portfolio contains 58 stocks, with three new positions and a turnover ratio of 11%. The top three sectors in terms of weight are consumer cyclical, consumer defensive and industrials, representing 19.16%, 18.34% and 14.37% of the equity portfolio.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

Danone

The fund purchased 423,582 shares of Danone, allocating 5.16% of its equity portfolio to the holding. Shares averaged 56.12 euros ($67.70) during the fourth quarter; the stock is modestly undervalued based on Thursday's price-to-GF Value ratio of 0.82.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

GuruFocus ranks the French dairy product company's profitability 7 out of 10 on the back of operating margins outperforming over 82% of global competitors despite three-year revenue and earnings growth rates outperforming just over half of global consumer packaged food companies.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

Sarah Ketterer (Trades, Portfolio)'s Causeway International Value (Trades, Portfolio) Fund also has a holding in Danone.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

Bayer

The fund purchased 253,375 shares of Bayer (XTER:BAYN), giving the position 2.76% weight in the equity portfolio. Shares averaged 46.21 euros during the fourth quarter.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

GuruFocus ranks the German drug manufacturer's financial strength 6 out of 10: Although the company has a safe Beneish M-score of -3.46, Bayer also has a low Altman Z-score of 0.27.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

David Herro (Trades, Portfolio)'s Oakmark International Fund also purchased shares of Bayer in the fourth quarter.

UBS Group

The fund purchased 745,729 shares of UBS Group (XSWX:USBG), increasing the position 83.73% and the equity portfolio 1.94%. Shares averaged 11.99 francs ($12.95) during the fourth quarter.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

GuruFocus ranks the Swiss bank's financial strength 3 out of 10: Although the investment bank has a high Piotroski F-score of 7, UBS Group's debt ratios underperform over 80% of global competitors, suggesting high financial leverage.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

H U Group

The fund sold 641,300 shares of H U Group (TSE:4544), cutting 56.31% of the position and 2.53% of the equity portfolio. Shares averaged 2,818.08 yen ($26.14) during the fourth quarter of 2020.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

GuruFocus ranks the Japanese medical research company's profitability 6 out of 10 on the back of profit margins and returns outperforming over 60% of global competitors.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

Haw Par Group

The fund sold 1.986 million shares of Haw Par Group (SGX:H02), slashing approximately 80% of the stake and 2% of the equity portfolio. Shares averaged 9.98 Singapore dollars ($7.47) during the fourth quarter.

IVA International Fund's Top 5 Trades of the 4th Quarter
IVA International Fund's Top 5 Trades of the 4th Quarter

GuruFocus ranks the Singapore-based drug manufacturer's financial strength 7 out of 10 on several positive investing signs, which include a strong Altman Z-score of 26.59 and an interest coverage ratio that outperforms over 89% of global competitors.

Disclosure: No positions.

Read more here:

  • David Herro's Top 5 4th-Quarter Trades

  • Warren Buffett's Modified Market Indicator Tops 140%

  • ValueAct's Top 5 Trades of the 4th Quarter



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This article first appeared on GuruFocus.